Income Optimisation for Salaried Worker - UK, PH, JP, NL, UAE

[MankouJoe]

I have been given the option to live in the Netherlands with 30% ruling but have been thinking about what to do post-ruling - Netherlands really doesn't look that appealing without the ruling. I am a salaried worker with $100k p.a., although have strong ties to my employer so I have the option of being employed through a different subsdiary - JP or UAE, although, ideally as an overseas worker - or splitting up my salary from different sources. I could also invoice the company as freelance for my services, so setting up my own entity and paying myself through that. The limitation here is the salary is not really that high, but possibly will be higher by the time the 30% ruling expires.

I have the following tools at my disposal:

- UK citizenship
- PH citizenship

I can set up an entity in either of those countries, or others, but I believe visas and residency to be my limitation. Philippines would be fine because I travel there often. Although, I would not want to live there on any permanent or semi-permanent basis.

How about Cyprus but residing in the UK and paying salary to a Philippine account, I'm guessing CRS would get me in this scenario. Or company admin would be way too high to justify it?

I don't mind paying tax, just nothing excessive, like say NL without 30% ruling or similarly the UK (which appears marginally better than the Netherlands). Residing in the UK or the EU is preferable.

An option I've considered is living in the Netherlands but paying SS in Japan. The benefit of this is, one, it's cheaper, and two I can get the pension portion refunded once the employment from the Japanese entity has been terminated.

 

[daniels27]

The question is always the same: are you looking for a legal version or are you fine with flying under the radar?

For the legal version: you need to figure out where you want to live and then pay there. There are tax rules and you need to adhere to them. If you are living in the Netherlands, you will have to pay there.

For the flying under the radar variant, my advise would be to split the income between NL, PH, UK, JP. Taxes on $25k p.a. are fairly low anywhere, especially if you claim the flight tickets as business expenses in each jurisdiction. That's also the reason why big companies always fly first class. If you spend $20k on a flight and claim it in 5 jurisdictions with 25% tax each, you actually save more tax than you spend.

Now, about all exotic places. Don't waste your time with it unless you want to live there. If you want to rent an apartment in Cyprus and have a use for it, go for it. If you open a company there as non-resident, your tax saving is gone quicker than you may imagine. Even one company audit will cost you more than you can ever save. I would only consider jurisdictions where you can do all by yourself and have somebody there who cares about your mail and scans it.

 

[JohnLocke]

Even one company audit will cost you more than you can ever save. I would only consider jurisdictions where you can do all by yourself and have somebody there who cares about your mail and scans it.

Curious, how much do you expect an audit for a company in Cyprus to cost, and what amount of tax do you anticipate the company would pay in Cyprus as a result?

 

[MankouJoe]

The question is always the same: are you looking for a legal version or are you fine with flying under the radar?

For the legal version: you need to figure out where you want to live and then pay there. There are tax rules and you need to adhere to them. If you are living in the Netherlands, you will have to pay there.

For the flying under the radar variant, my advise would be to split the income between NL, PH, UK, JP. Taxes on $25k p.a. are fairly low anywhere, especially if you claim the flight tickets as business expenses in each jurisdiction. That's also the reason why big companies always fly first class. If you spend $20k on a flight and claim it in 5 jurisdictions with 25% tax each, you actually save more tax than you spend.

Now, about all exotic places. Don't waste your time with it unless you want to live there. If you want to rent an apartment in Cyprus and have a use for it, go for it. If you open a company there as non-resident, your tax saving is gone quicker than you may imagine. Even one company audit will cost you more than you can ever save. I would only consider jurisdictions where you can do all by yourself and have somebody there who cares about your mail and scans it.

Thanks. The legal version basically writes-off the Netherlands as even with a company, this salary (turnover) level barely makes it worth it. The UK would be better company but then I would have to be certain I want to spend 183 days p/year there, which is a possibility but does increase personal costs quite substantially if I end up liking mainland Europe.

Is CRS so much of a concern when flying under the radar for smaller amounts of 10-25k over a year?

Admin costs could easily eat into any benefit when we're talking about turnover of 100k. As for something like Cyprus, I would have to really dig into the cost side of it. If there was a benefit I could most likely get my employer onboard with the idea, this reduces the cost risk however increases my exposure to my employer. I don't think either of us would want to become a resident in Cyprus.

 

[daniels27]

Is CRS so much of a concern when flying under the radar for smaller amounts of 10-25k over a year?

If you are registered as local only in each jurisdiction and use different passports, there won't be any CRS reports.

Admin costs could easily eat into any benefit when we're talking about turnover of 100k. As for something like Cyprus, I would have to really dig into the cost side of it. If there was a benefit I could most likely get my employer onboard with the idea, this reduces the cost risk however increases my exposure to my employer. I don't think either of us would want to become a resident in Cyprus.

Yes, please check. I think the audit in Cyprus alone is 2000 EUR. And then some taxes. Not sure if it makes sense. I would split the income and share the expenses.

Curious, how much do you expect an audit for a company in Cyprus to cost, and what amount of tax do you anticipate the company would pay in Cyprus as a result?

Depends on the number of transactions. But I doubt less than 2000 EUR. Probably more like 5000 EUR if you claim a lot of expenses. It will already be 5% of the revenue, probably more like 10% to 15% if the profit. I doubt that it makes sense.